Imported Spreadsheets to Zoho
I mentioned in another post that I started using Zoho recently. Zoho offers a suite of "office" software online. They have online word processor, spreadsheet, presentation and many other types of software that traditionally resides on a local computer. Having these software online lets me access my documents from anywhere. It also lets me share my documents with the world without requiring Microsoft Excel. My experience so far has been very good. I have created a few Excel spreadsheets and linked to them on this blog in the past. Zoho's spreadsheet program correctly imported them without glitch. Here they are if you'd like to use or bookmark them:
ESPP Rate of Return – Calculates the annualized return from Employee Stock Purchase Plan (ESPP) purchase and sale. See previous post Employee Stock Purchase Plan (ESPP) Is A Fantastic Deal.
Notes From an Overseas Vacation
I didn't post to my blog last week because I was on vacation in another country. It was really refreshing even though the weather wasn't 100% cooperative. Now, here are some random personal finance related notes from my vacation.
Exchanging money. The best way to get the local currency is still using the ATM card, as long as you don't pay a foreign ATM surcharge. Banks and money exchange services post two rates — a "buy" rate and a "sell" rate. The lower "buy" rate is used when you exchange US dollars into the local currency. The "sell" rate is used when you exchange the local currency back to US dollars. My Fidelity mySmart Cash account does not have any surcharge for using the ATM card overseas. Visa charges 1% extra on top its wholesale exchange rate, which is better than the retail rates posted by the bank branches. The all-in exchange rate I received from using the ATM card was close to the "sell" rate posted at local banks and money exchange counters. If I exchanged my US dollar bills at a bank, I would get the "buy" rate which is 2-3% less.
I charged a hotel bill to my American Express card. American Express charges 2% for foreign transactions. But because American Express also gives me a rebate for using its card, it evens out to a wash between the exchange rate surcharge and the rebate.
Roth 401(k) for People Who Contribute the Max
Back in March I wrote The Case Against Roth 401(k) in which I said I think for most people the majority, if not 100%, of the contribution should go to a Traditional 401(k). I gave these reasons:
- Fill in lower tax brackets in retirement
- Avoid high state income tax
- Leave the option open for Roth conversion in the future
- Avoid triggering phase-outs and AMT
I still believe these are valid reasons in favor of contributing to a Traditional 401k instead of a Roth 401k. A few comments to that post said Roth is better because a Roth 401k lets you effectively shelter more from taxes than a Traditional 401k. That is true. My response was that the higher effective maximum comes into play only if someone actually contributes the maximum allowed, currently at $15,500 per person per year. According to a study by Vanguard, only 10% of people contribute the maximum. It's not surprising because in order to contribute the maximum, you need either a high income, a high savings rate, or both. Consider a married couple. The combined 401k and IRA maximum contributions are $41,000 per year. At 25% savings rate, this couple needs $160,000 of income. At 15% savings rate, this couple has to earn $270,000.
Free Digital TV Over the Air
Don't laugh. I finally got TV in my home. I have a TV, the physical device. I use it for watching DVDs. I just haven't had TV programming in the last few years. I canceled my cable subscription because I found myself not watching at all for weeks on end. Occasionally I wanted to watch something like the Oscars or the Olympics. I also missed the PBS programs although I don't understand why they keep having Robert Kiyosaki and Suze Orman on their personal finance shows. Because I live far from the broadcast towers, the signal quality from an indoor antenna isn't very good. So I didn't bother.
A couple of months ago I read on the Bogleheads forum that you can get a coupon from the government for a digital TV converter box if your TV doesn't have a digital tuner, because broadcast TV will move to all digital in February 2009. You can ask for up to two coupons, each worth $40. It took them two months to send me the coupons. I went to Circuit City and bought myself a converter ($60 plus tax, minus $40 coupon) and an indoor antenna. I hooked them up and voila, I got TV! I receive about 20 channels, not counting the ones which broadcast in languages I don't understand. For the channels I receive, the signal is crystal clear. There is no static or distortion. I guess that's the benefit of digital broadcasting. But out of the major network stations, I only get Fox, not ABC, NBC or CBS. I'm not sure whether it's because they are not broadcasting in digital yet or their signals are still too weak for me. I'll go to Radio Shack tomorrow and try some different antenna.
Book Review: Gotcha Capitalism
I'm reviewing the book Gotcha Capitalism today. I first heard about the book on public radio. The author Bob Sullivan was interviewed on Fresh Air by Terry Gross (36 minutes) and on Marketplace by Tess Vigeland (7 minutes). This book is about the annoying fees and the disingenuous pricing and marketing schemes we face every day from many places. You know those fees. They are everywhere. I also wrote about a few of them in the past: ATM surcharges, bank overdraft or NSF fees, credit card late fees, 12-month-same-as-cash deferred interests, finance charge in insurance payment plans, 401(k) plan admin fees, and numerous fees in VUL policies. There are also many more I haven't touched on: airline excess baggage fees, cell phone early termination fees, hotel parking fees, many mysterious line items on rental car contracts and telephone bills, etc. etc.
Some of these fees are more of a nuisance while some (like 401(k) plan admin fees and VUL fees) are more serious. The author puts it very elegantly:
Smart Move: Microsoft Withdrew Offer for Yahoo!
News came that Microsoft withdrew its takeover offer for Yahoo! Microsoft originally offered $31 a share. They were willing to raise to $33, but Yahoo! was looking for $37. What's another $4 a share? You'd think Microsoft can shake loose another $4 a share from somewhere given its size and its desire to compete with Google. But Microsoft called it quit. It's a smart move for Microsoft. Yahoo! is like those people who list their houses at unrealistic prices. They wouldn't budge on price. Their houses just sit on the market. When they finally become motivated, the prices have gone even lower. Now Microsoft withdraws its offer and lets Yahoo! shares fall into the teens. Let Yahoo! shareholders put pressure on its management. Wait a couple of quarters and see if they will change their mind. By that time, Yahoo! shareholders will beg for maybe even $25 a share. Microsoft's money is better spent on acquiring some smaller, more innovative companies, like Zoho, which I started using lately. I think Zoho's products are much better than Google Docs.
A Tale of Two Charts
The S&P/Case-Shiller Home Price Indices came out for February 2008. They showed a year-over-year decline for most cities. The announcement from Standard & Poor's came with the following chart (click on it for a larger size).
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